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Famously bearish economist Nouriel Roubini, nicknamed "Dr. Doom" for his early negative views on housing, is extending his pessimism to an asset whose owners often share his views: gold.

Speaking at the Reuters Investment Outlook Summit Tuesday, Roubini said that gold -- which has repeatedly flirted with the $1000/oz. mark this year -- "looks toppy."

Gold is often seen as an inflation hedge that will rise as the value of the dollar falls. But inflation is an overblown concern at present, according to Roubini. "For the next two years, deflationary pressure is going to be dominant, and it is going to become a time bomb down the line if and when we keep monetizing large deficits. It may be too soon to hedge with gold."

Roubini's comments come as an interest in owning physical gold has reached high levels. According to Market Folly, a site that tracks hedge fund investment activity, several prominent hedge fund managers have been buying the metal this year.

John Paulson of Paulson & Co., known for making billions shorting subprime mortgages, and David Einhorn of Greenlight Capital, who vocally criticized the balance sheet of investment bank Lehman Brothers shortly before the firm went under, both have been large buyers of the metal. They are joined by Stephen Mandel of Lone Pine Capital and Eric Mindich of Eton Park Capital, both of whom also have substantial exposure to the SPDR Gold Shares ETF (GLD) in their mult-billion dollar funds.

As hedge funds become gold-happy, not everyone is buying into the hype. Vitaliy Katsenelson, Director of Research at Investment Management Associates and author of the book Active Value Investing, is more cautious. "Unlike stocks or bonds, gold has no cash flows and has a negative cost of carry -- it costs you money to hold it," he explained to DailyFinance. The ultimate value is what gold sells for, and is thus purely dependent on the perceptions of other buyers and sellers.

Traditionally, "gold had a monopoly on inflation and fear trade." But Katsenelson sees the dynamics of owning gold changing. "Now, you have newly emerging competition from TIPS [Treasury Inflation-Protected Securities], currency ETFs, short US Treasury ETFs, and more," all of which express investment views similar to those normally associated with owning gold as a hedge.

Worried about inflation? Instead of gold, Katsenelson says, "The best solution that has the lowest cost of being wrong [with respect to inflation] is to own stocks of companies that have pricing power, the ones that will be able to raise prices and thus maintain their profitability."